Ominous start for the new year:
EU Officials Begin New Year With Calls to Save the Euro
Published: Sunday, 1 Jan 2012 | 5:49 PM ET
By: Reuters
Policymakers marked the 10th anniversary on Sunday of the introduction of euro notes and coins by urging governments in the currency bloc to save and consolidate to overcome their debt crisis.
While German Finance Minister Wolfgang Schaeuble called the euro “a clear success story” and pledged the currency would remain stable, he also urged vulnerable debtor states to follow a tough savings course in 2012, boost their competitiveness and work to win back market confidence.
“This is not a euro crisis, it is a debt crisis in some euro states,” Schaeuble told German newspaper Bild in an interview to be published in Monday’s edition of the paper.
Sounds like he’s going for a “Mob Guarantee”.
A clear success story XD. For him, it probably is.
If I was in the Mint or whoever designs commemorative editions, I’d be a bit bold in my design – 2012: Euro-apocalypse.
Mr. Mosler’s proposal of having bonds accepted to redeem taxes would be great, possibly a good way to phase out the euro without much of a mess.
“save and consolidate” sounds almost like “Ordnung muss sein”
They will blame the war in Persian Gulf for the looming crisis in German economy. There must be a reason why a leading pro-European Polish newspaper writes articles about the “first war in 2012”. Even if Iran is not “liberated” they will find another excuse. What if the German soccer team loses Euro 2012?
I really don’t fully understand the Euro Crises.
I have heard rumors Germany is printing Deutschmarks just in case.
Could someone unexpectedly pull out like Ireland as a preemptive move figuring it would be to there advatage to be first.
Or Greece pulls out because the austerity is unbearable.
Or Germany reissues there own currency and lets the EURO go its own way.
@Tom,
If I was ruler of Italy, Portugal, Greece, Ireland or Spain, the Secret Services would be printing the old money in secret.
Just in case 😉
Unrelated to your post above (I hope you’ll indulge me), but I have written a quick post on the history of MMT:
http://socialdemocracy21stcentury.blogspot.com/2012/01/history-of-modern-monetary-theory.html
A quick question I have is: did Charles Goodhart influence your development of MMT/soft currency economics, Mr Mosler?
Any comments and criticisms on my post are most welcome.
Will check it out, thanks.
I didn’t meet Charles until a few years after SCE was written.
@Lord Keynes,
Nicely done, Lord. Thanks for putting that together.
You would think they would celebrate the 10th anniversary of the Euro by showering the public with notes and coins, not by taking them away.
I think it’s pretty unlikely anyone will pull out. Not impossible. It would be absolute chaos and would probably destroy whatever confidence remains in the country. mixed bag.
@rodney,
Not sure everyone wants to live in the United States of Germany. If you look at Argentina there is only so much pain people are willing to bear. Greece can’t go on the way it has. If ‘austerity’ continues there will be (more) riots and that will bring some change. The CEPR website has a lot on Argentina’s experience, it actually seemed to be quite positive to get out from under the IMF reign of terror.
@rodney,
Those (default, new currency, etc) effects are short-lasted. The effects of austerity drain on the economy for decades.
Interesting bit from an (associate?) of M.L. Burnstein, concerning the deflationary effect of hoarding. Little mention of gov’t spending to compensate for it, but an interesting read anyway:
http://hnn.us/articles/129965.html
On unrelated issue – who is Rick “sanctum sanctorum” Santorum? Is he another less sinful incarnation of Herman Cain?
What is the chance that he going to be anointed to be the next ruler of the Lower-Middle Kingdom of Austerity? Rupert (or rather Wendi) might have made up his mind already.
@Adam (ak), Rick Sanatorium? Soz, couldnae resist…
Give up the sovereign’s monopoly on the money supply and give up sovereignty.
We’re doing a bit of the same, just not talking about it as much. Stealth Austerity.
Americans’ Incomes Have Dropped 6.7 Percent During the ‘Recovery’
http://www.sentierresearch.com/HouseholdIncomeIndexChart1.html
http://www.sentierresearch.com/HouseholdIncomeIndex.html
ps: Austerity exhibits hysterity-esis; never gets back to the same incomes or Ag Demand/Productivity/Capabilities/Output. We’ve just written off part of what we could have been, & had for our descendants.
The DTs have it backwards. We’re not borrowing from our grandchildren, by limiting exploration of current options, we’re leaving them with fewer options to work with!
@roger erickson, We are stunting our posterity.
Warren, what’ happening in Hungary? in your view, investors fear the “fascist drift” (they call it) or there is something else that the Central Bank is doing?
thanks.
@Luigi,
There is a new blog written by Bill Mitchell addressing the financial and economic (not political) side of the crisis in Hungary:
http://bilbo.economicoutlook.net/blog/?p=17645
Pro-European newspapers it other EU countries are hysterical (as you know) about Viktor Orban. I am not one of his fans either but for slightly different reasons.
haven’t been following it